NY4 4027225.

3
DEWEY & LEBOEUF LLP
1301 Avenue of the Americas
New York, New York 10019
Telephone: 212.259.8000
Facsimile: 212.259.6333
Martin J. Bienenstock, Esq.
Irena M. Goldstein, Esq.
Timothy Q. Karcher, Esq.

Attorneys for Ad Hoc Committee of Preferred Shareholders
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
INNKEEPERS USA TRUST, et al.,
Debtors.
AD HOC COMMITTEE OF PREFERRED
SHAREHOLDERS,
Movant,
-against-
INNKEEPERS USA TRUST, et al.,

Respondents.

Chapter 11

Case No. 10 13800
(SCC)
(Jointly Administered)


x
)
)
)
)
)
)
X
)
)
)
)
)
)
)
)
)
)
)
x



REPLY OF AD HOC COMMITTEE OF PREFERRED SHAREHOLDERS
TO OBJECTIONS TO MOTION FOR ORDER DIRECTING APPOINTMENT
OF STATUTORY COMMITTEE OF PREFERRED SHAREHOLDERS
PURSUANT TO BANKRUPTCY CODE SECTION 1102(a)(2)

TO THE HONORABLE SHELLEY C. CHAPMAN
UNITED STATES BANKRUPTCY JUDGE:


NY4 4027225.3
2
The Ad Hoc Committee of Preferred Shareholders (the Ad Hoc Committee)
1
in
the above-captioned chapter 11 cases of Innkeepers USA Trust (Innkeepers), its parent
corporation Grand Prix Holdings, LLC (Grand Prix) and their direct and indirect title
11 debtor subsidiaries (collectively, with Innkeepers and Grand Prix, the Debtors), in
further support of its Motion for an Order Directing Appointment of a Statutory
Committee of Preferred Shareholders Pursuant to Bankruptcy Code Section 1102(a)(2),
dated September 13, 2010, [Docket No. 435] (the Motion), hereby replies to the
objections and responses thereto filed by the following objectors (the Objectors) United
States Trustee (the U.S. Trustee) [Docket No. 453] (the U.S. Trustees Objection),
Midland Loan Services, Inc. (Midland) [Docket No. 477] (the Midland Objection),
C-III Asset Management, LLC (C-III) [Docket No. 483] (the C-III Response),
CWCapital Asset Management LLC (CWCapital) [Docket No. 484] (the CWCapital
Response), Lehman ALI Inc. (Lehman) [Docket No. 490] (the Lehman Objection),
Wells Fargo Bank, N.A. (Wells Fargo) [Docket No. 492] (the Wells Fargo
Objection), the Official Committee of Unsecured Creditors (the UCC) [Docket No.
493] (the UCC Objection), and the Debtors [Docket No. 497] (the Debtors
Objection, together with the U.S. Trustees Objection, the Midland Objection, the C-III
Response, the CWCapital Response, the Lehman Objection, the Wells Fargo Objection,
and the UCC Objection, the Objections), and respectfully represents as follows:
SUMMARY OF ARGUMENT
1. The preferred shareholders interest in these cases appears to be $55
million, and potentially more: (a) $7.4 million is sitting in a bank account controlled by

1
The following holders of approximately 24.0% of Innkeepers 8% Series C Cumulative Preferred
Shares comprise the Ad Hoc Committee: Brencourt Advisors, LLC; Esopus Creek Advisors, LLC;
and Plainfield Special Situations Master Fund II Limited.

NY4 4027225.3
3
Innkeepers above the corporate level where the blanket mortgagees and trade creditors
hold claims, (b) as set forth in the Declaration of Anders Maxwell (the Maxwell
Declaration) in support of the Motion, approximately $47.5 million in implied equity
value exists in the Unencumbered Debtors, and (c) the value of controlling all the hotels
having mortgage debt written down to their collateral values. Significantly, none of the
Debtors letters to the United States trustee opposing a preferred shareholders committee
disclosed the existence of the $7.4 million bank account.
2. Currently, only three (3) preferred shareholders have appeared in these
cases in the following circumstances: (a) the United States trustee declined to appoint a
statutory preferred shareholders committee, (b) the Debtor pronounced the shareholders
out of the money in its proposed chapter 11 plan, (c) the Debtor attempted to lock itself
into a plan that extinguished all preferred shareholders while providing the sole common
shareholder the right to purchase half the reorganized debtor, and (d) the statutory
creditors committee filed a no-objection to the debtors motion to lock itself into its
proposed plan limiting all unsecured claims to a distribution of $500,000 while
extinguishing all shares.
3. Notwithstanding the undisputable record showing the Debtors, the
Debtors management, the Debtors owner, and the creditors committee, all support
extinguishing the preferred shareholders for nothing, the United States trustee contends
the preferred shareholders are adequately represented. Why? Because when the
preferred shareholders were at peril of being extinguished with no representation, three
(3) lone holders retained a law firm to defend against sudden death. The moral is this: if
you lack any representation, retaining an attorney to save yourself from extinction

NY4 4027225.3
4
disqualifies you from being entitled to a statutory committee to attain adequate
representation. Put differently, if you need representation, you better not defend yourself
before months go by while the United States trustee and the court rule on your motion for
a statutory committee.
4. Notably, the Debtors and the statutory creditors committee have endorsed
the United States trustees position. So, lets paint the picture and policy the United
States trustee is advocating: (a) its okay for estate resources to be used by the Debtors
advisors to extinguish preferred shareholders while providing the common shareholder
the right to purchase half the reorganized debtor at an unsubstantiated value, (b) its okay
for estate resources to fund the statutory creditors committee to agree at the outset of the
case to limit distributions to unsecured claims to $500,000 while the committees
advisors will cost millions (why not just suspend further activity by the statutory
creditors committee and give creditors the fees saved in addition to the $500,000?), (c)
its okay for the estate to pay Lehmans fees for supporting a plan that gives Lehman
more than it could receive if it enforced all its rights, but (d) its not okay for the estate to
pay the fees of a preferred shareholders committee to serve as the only entity in the case
maximizing value for unsecured claimholders and shareholders. Translation: it appears
the objectors support use of estate resources for every purpose other than to carry out
valid public policies.
ARGUMENT
A. Preferred Shareholders Have No Adequate Representation in
these Chapter 11 Cases
5. The Objectors contend preferred shareholders have adequate
representation in these chapter 11 cases because the Ad Hoc Committee (i) has retained

NY4 4027225.3
5
well-respected and experienced restructuring counsel, (ii) has actively participated in
several court hearings so far, and (iii) can rely upon the board of directors,
management, UCC and the secured lenders to protect the interests of preferred
shareholders. See Debtors Objection at 4-5; U.S. Trustees Objection at 9-10; UCC
Objection at 13-15. The Objectors flattery gets them nowhere and does not camouflage
their arguments' lack of merit. The Objectors reference to the UCC is a smoking gun.
As a matter of law, the UCCs constituency is the universe of unsecured claimholders.
The UCC would violate its statutory and fiduciary duties by holding out for one penny
for preferred shareholders. The suggestion by the Objectors that the existence of the
UCC provides any representation of preferred shareholders demonstrates the Objectors
cannot show the class of preferred shareholders has any representation, let alone adequate
representation. Moreover, the facts of this case recited above prove the absence of any
representation. The Court found that the Board
2
and management caved in carrying out
their duties by cutting a sweetheart deal for Apollo
3
(that wiped out equity). Indeed, if
Lehman had prosecuted all its rights, it could at best have acquired twenty (20)
properties, but was gifted ownership and control of another fifty-two (52) properties and
relieved of a claim carrying a 2.25% interest rate to boot! The UCC was willing to
support a chapter 11 plan that capped unsecured recoveries at $500,000 (and wiped out
equity). The secured creditors want to propose a plan that gives control of the Debtors to
the secured creditors (and wipes out equity). How can any of these parties say that equity

2
Capitalized terms used herein, but not defined, shall have the meaning or meanings ascribed thereto in
the Motion.
3
See September 1 Transcript at 420, lines 2-10 (The testimony of Mr. Beilinson [the Debtors Chief
Restructuring Officer] on these points reveals Lehman wielded great power in the negotiations and Mr.
Beilinson seems to have succumbed to virtually all of their demands.).

NY4 4027225.3
6
is adequately represented when there are millions of dollars in cash not subject to these
creditors claims and there appears to be residual equity value in other properties not
subject to blanket mortgages?
6. The Objectors essentially ask this Court to penalize preferred shareholders
who have protected their rights by hiring experienced counsel on their own dime. The
Objectors propose a Catch-22 policy: Parties seeking appointment of a statutory
committee must refrain from hiring competent counsel to ensure that no party in interest
accuses them of being adequately represented, even though the risk of that policy is that
the parties rights will be extinguished. Put another way, is the Congressional mandate of
Bankruptcy Code section 1102(a)(2) carried out by a ruling that interest holders who
retain attorneys to protect themselves from extinguishment before a committee motion is
granted, are thereby disqualified from relief under section 1102(a)(2)? Absolutely not.
No single policy can more blatantly run afoul of the well-established Congressional intent
to protect shareholders in chapter 11 cases, which is set forth in the legislative history of
section 1102:
[I]t should be emphasized that investor protection is most critical
when the company in which the public invested is in financial
difficulties and is forced to seek relief under the bankruptcy laws.
A fair and equitable reorganization, as provided in the bill, is
literally the last chance to conserve for them values that corporate
financial stress or insolvency have placed in jeopardy. As public
investors are likely to be junior or subordinated to creditors or
debtholders, it is essential for them to have legislative assurance
that their interests will be protected. Such assurance should not be
left to a plan negotiated by a debtor in distress and senior or
institutional debtors who will have their own best interest to look
after.

S. Rep. No. 989, 95th Cong., 2d Sess. 10 (1978).

NY4 4027225.3
7
7. The Objections cite the Ad Hoc Committees filing of motions,
appearance at court hearings, and taking of discovery to evidence the active
participation of preferred shareholders in these cases prior to the appointment of a
statutory committee. The fact that the Ad Hoc Committee had to take all of these steps in
just the first two months of these cases illuminates the critical role preferred shareholders
will play in the negotiation of a plan over the weeks and months ahead. The Debtors
concede as much and have stated that they fully expect to build on their recent
discussions with the Preferred Shareholder Group to make progress towards a consensual
restructuring that maximizes value for all of the Debtors major stakeholders. See
Debtors Objection at 15. The Debtors fail to explain why their negotiations with
creditors not objecting to a capped payment of $500,000 should be paid for by the estate,
while their negotiations with preferred shareholders of entities the creditors have no
claims against must be paid for by 3 lone preferred shareholders.
8. Significantly, many of the cases upon which the Objections rely argue for
the appointment of a statutory committee in connection with plan negotiations and
hearings.
4
Notably, the legislative history also supports this envisioned role of a statutory
equity committee in a chapter 11 case: [E]quity security holders committees. . . will be
the primary negotiating bodies for the formulation of the plan of reorganization. . . They
will also provide supervision of the debtor in possession and of the trustee, and will

4
See e.g., In re Beker Indus., 55 B.R. 945, 949 (Bankr. S.D.N.Y.) (appointing statutory committees
where the case [requires] active participation by. . . shareholders to protect their interests.); In re
Johns-Manville Corp., 68 B.R. 155, 161 (S.D.N.Y. 1986) (refusing to appoint a statutory committee
because the application came so late in the case, but noting that [s]ince one of [a statutory
committees] most important functions is to negotiate a reorganization plan, a committee will most
effectively exercise its responsibilities at the beginning of a reorganization, prior to the formulation of
a plan.); In re Saxon Indus., 39 B.R. 945 (Bankr. S.D.N.Y. 1984) (denying reconstitution of a
statutory committee already appointed by the U.S. Trustee, but emphasizing the primary function of
committees in Chapter 11 cases is participation in the formulation of a plan of reorganization.).

NY4 4027225.3
8
protect their constituents interests. H.R. Rep. No. 595, 95th Cong., 1st Sess. 401
(1977). The appointment of a statutory preferred shareholders committee in these cases
will undoubtedly ensure that preferred shareholders have a seat at the plan negotiating
table over the critical weeks and months ahead.
9. The Objections also overlook a crucial detail that courts unanimously
consider in the evaluation of statutory committee appointment: the members of the Ad
Hoc Committee do not have a fiduciary duty to the preferred shareholder class. Courts
have recognized that [i]t is equally important to have a committee that does not merely
represent only the interests of those who invest in distressed debt or equity. An official
equity committee would take on a fiduciary duty to all current shareholders and its
compensation would be subject to the approval of the Court. In re Oneida Ltd., No. 06-
10489, 2006 WL 1288576, at *3 (Bankr. S.D.N.Y. May 4, 2006).
10. The Objectors seek to establish a perverse needs test for the
appointment of a statutory committee. Only unsophisticated and unfunded investors may
apply. According to the Objectors, the large investor, with the most relevant experience,
should not be allowed to sit on the committee because it has the wherewithal to fund its
own fight. The Court should flatly reject such an approach based on the jurisprudence in
this district. See Beker, 55 B.R. at 949 (rejecting opposition to statutory committee
appointment by noting [t]he position that some members of the class may have
resources sufficient to protect their interests is of little significance, in our judgment. . .
They do not have the fiduciary duty to represent their fellow security holders.); Johns-
Manville, 68 B.R. at 159 (Although some shareholders might have the resources to

NY4 4027225.3
9
protect their own interests, the shareholdersin contrast to official committee
membersdo not have a fiduciary duty to represent the interests of other shareholders.).
11. The Objectors position also ignores purposefully financial reality as the
Objectors well know. That a holder of preferred shares can afford to retain a law firm,
has no bearing whatsoever on whether it makes any financial sense for a minority of
shareholders to bear the cost of the representation of the entire class of preferred
shareholders. Moreover, the speculative prospect of reimbursement later is no answer.
12. The appointment of a statutory preferred shareholders committee will
afford all preferred shareholders, not just the three holders that comprise the Ad Hoc
Committee, with the necessary protection against the natural tendency of a debtor in
distress to pacify large creditors, with whom the debtor would expect to do business, at
the expenses of small and scattered investors. S. Rep. No. 989, 95th Cong., 2d Sess. 10
(1978).
13. Absent a statutory preferred shareholders committee, preferred
shareholders cannot expect any representation, let alone adequate representation, from
these parties. The record of this case makes that doubly clear.
14. First, the Debtors management and Board have already tried to extinguish
preferred equity while providing the right to purchase half the reorganized debtors equity
to the common shareholder. By their own admission, [t]he Debtors still believe,
nonetheless, that an enterprise-level restructuring, as opposed to a piecemeal dismantling
of the Debtors business, will maximize value for distribution to their stakeholders based
on their respective priorities. . . Debtors Objection at 13. Without a preferred
shareholders committee protecting the rights of preferred shareholders, the Debtors will

NY4 4027225.3
10
try to steamroll the stockholders once again, and every other party-in-interest is only
concerned with maximizing its return even at the expense of the preferred shareholders.
Indeed, the Debtors initial plan provided Lehman ownership of the Unencumbered
Debtors that may provide preferred shareholders with a substantial recovery.
15. The Debtors and Lehman have been predictably contrite. The Debtors
argue that they do not believe that the mere fact that they sought to assume the PSA
demonstrates the Debtors inability to act in the best interests of their estates for the
benefit of all stakeholders for all time to come. Debtors Objection at 13. Likewise,
Lehman argues that the the fact that preferred shareholders may not have been directly
represented in prepetition negotiations is irrelevant because the litany of actions by the
Debtors that purportedly demonstrate the absence of representation of preferred
shareholders. . . took place prior to the bankruptcy cases. See Lehman Objection at 3.
Lehmans argument ignores what the Debtors did postpetition. It ignores that the Debtors
opposition to the preferred shareholders' committee never mentioned to the U.S. Trustee
the bank account holding $7.4 million. It ignores that Apollos chief executive officer
and other Apollo officials dominate the Debtors Board and Apollos ownership
continues to provide it total control of all decisions.
5
The fact is that the Debtors and

5
Notably, the Debtors cite National R.V. Holdings, Inc., 390 B.R. 690 (Bankr. C.D. Cal.) as an example
of a case where a bankruptcy court (albeit one well outside this District) declined to appoint a statutory
equity committee. The Debtors fail to mention that the bankruptcy court emphasized that it reached its
decision because there are no facts to suggest that management is not aligned with non-insider equity
holders, and that [t]he Ad Hoc Equity Committee has not presented any evidence that the Debtors
officers or directors have either breached their fiduciary duties to the equity security holders or are
incapable of properly discharging their fiduciary duties in these jointly administered cases. Natl R.V.
Holdings, 390 B.R. at 699. This case is clearly inapposite to the facts before this Court, and if
anything, militates in favor of the appointment of a statutory preferred shareholders committee on the
finding (as this Court did on September 1, 2010) of violations of fiduciary duties alone. Similarly, the
UCC cites In re Edison Bros., 1996 WL 534853 (D. Del. Sept. 17, 1996), where the United States
District Court for the District of Delaware affirmed a bankruptcy courts denial of the appointment of
an official equity committee. The District Court accepted the bankruptcy courts finding that there
was [no] inherent conflict of loyalty between insider shareholders and non-insiders, there were no

NY4 4027225.3
11
Lehman tried to wipe out preferred equity in a deal reminiscent of the evils exposed by
bankruptcy reformers in the 1930s.
16. Despite the U.S. Trustees unsupported assurance that officers and
managing employees can be depended upon to carry out the fiduciary responsibilities of a
trustee, the Ad Hoc Committee believes the Debtors actions thus far in the case speak
louder than words. See U.S. Trustees Objection at 9 (quoting Commodity Futures
Trading Commission v. Weintraub, 471 U.S. 343, 355 (1985)). The Board approved a
Plan Support Agreement that extinguished the interests of preferred shareholders in favor
of a single controlling common shareholderApolloreceiving an exclusive right to
purchase half the reorganized debtors without any market testing or public auction. The
Debtors Chief Restructuring Officer, Mr. Beilinson, testified that Apollo has the power
to replace all of the directors, and in essence, controls the Board. See September 1
Transcript at p. 261, lines 23-25. Apollo hand-picked Mr. Beilinson to first serve on the
Debtors Board (on which Apollos CEO also serves), and later the board of Apollos real
estate investment trust. Put simply, there is absolutely no way current management or the
Board was looking out for the interests of anyone but themselves and Apollo. In addition
to the lack of fairness to date, the Debtors have shrouded the cases with the appearance of
lack of fairness. As aforesaid, in all their correspondence with the U.S. Trustee claiming
that the equity had no value, the Debtors, the Board, and management never told the U.S.
Trustee about $7.4 million in cash sitting at Innkeepers USA Limited Partnership

facts to suggest management was not aligned with non-insider shareholders, and [shareholders] did
not provide any evidence to the contrary. Edison Bros., 1996 WL 534853, at *3, *4, *5. Again, the
record before this Court compels a very different conclusion.

NY4 4027225.3
12
(Innkeepers USA LP). This $7.4 million is sitting in an account controlled by
Innkeepers USA LP -- no other party has control over the account.
6

17. Nor can the preferred shareholders expect the UCC to protect its interests.
Courts have long recognized the divergence of interests between shareholders and
unsecured claimholders in chapter 11 cases.
7
And for good reason. The UCC in these
cases has already shown that it stands (literally) at odds with preferred shareholders: by
its own admission, at the September 1, 2010 hearing, the UCC was standing up with
what parties believe to be the bad guys [the Debtors, Lehman, and Apollo] who put
together this PSA and have every intention of wiping out equity and significantly writing
down debt as part of this de-leveraging process thats really geared to give the company
back to Apollo. See September 1 Transcript at p. 94, lines 13-18. When read with these
words in mind, the UCCs statement in its Objection that it did not support the PSA
exposes its lack of credibility. The UCC filed a pleading providing it did not object.
8

The UCC participated at the trial on the Debtors side. The UCC argued in support of the
Debtors motion. The UCC has no concern whatsoever for preferred shareholders. It
owes no duty to them and showed its willingness to cap distributions at $500,000 for

6
Revised Article 9 of the Uniform Commercial Code requires control over a bank account in order to
have a security interest in such account.
7
See Pilgrims Pride Corp., 407 B.R. 211, 217, n. 17 (Bankr. N.D. Tex. 2009) ([W]hen it comes to
valuation and determination of future capital structure for plan purposes, their agendas are likely to be
very much at odds.); In re Saxon Indus., 29 B.R. 320, 321 (Bankr. S.D.N.Y. 1983) (stating that the
two committees are separate and distinct entities with the members of the unsecured creditors and
equity creditors classes possessing variant priorities and interests with respect to their relationship with
the debtor); but see In re Williams Commcns Group, 281 B.R. 216, (denying the appointment of a
statutory equity committee precisely because the UCC has sufficiently aligned or parallel interest with
the Shareholders to preclude the need for an additional committee.).
8
See Reservation of Rights of the Official Committee of Unsecured Creditors in Response to Debtors
Plan Support Agreement Motion, dated August 23, 2010 [Docket No. 264], at 17 (The Committee is
rightfully concerned the termination of the PSA could pose substantial risk to the survivability of the
Debtors business. For this reason, the Committee does not oppose the Debtors motion. (emphasis
supplied)).

NY4 4027225.3
13
unsecured claims. Clearly, this is akin to a trade committee that is more concerned with
being trade vendors tomorrow, than getting paid for yesterdays bills. That is the trades
prerogative, but that objective does nothing for preferred shareholders.
18. Like the Debtors Board and management, and the UCC, the secured
claimholders and mortgagees in these cases do not represent the interests of preferred
shareholders either.
19. Tellingly, all of these constituenciesthe Debtors Board and
management, the UCC, and the mortgageesoppose the appointment of a statutory
preferred shareholders in these cases. Preferred shareholders clearly cannot receive
adequate representation here without their own statutory committee when every single
constituency opposes them and their opposition is funded by the estate. The Debtors and
UCCs professionals are funded by the estate pursuant to the Bankruptcy Code, and the
mortgage servicers are funded by the estate by virtue of the value of the collateral which
goes to reimburse the mortgage servicers first.
20. Courts have appointed statutory equity committees solely to preserve the
appearance of integrity and fairness in the bankruptcy process, even after finding that
shareholders were out of the money and would receive no distributions, let alone
meaningful distributions, under the plan. In Amresco, Inc., Case No. 01-35327 (N.D.
Tex. 2001), the Bankruptcy Court appointed a statutory equity committee after finding
the debtors management could not adequately represent shareholders due to allegations
of prepetiton impropriety, emphasizing that a bankruptcy case is about more than the
return to creditors and the reorganization or sale of the debtor. The bankruptcy case is

NY4 4027225.3
14
also about the fair and equitable adjustment or elimination of claims and equity
9
The
Amresco court further noted:
The debtor and the unsecured creditors committee contend that
equity is out of the money even though Amresco had reported
value until it filed its schedules. They argue that theres nothing
for equity to represent. But under the facts and circumstances of
this case, acceptance of that position as a legitimate result of a
bankruptcy process compels that equity have a formal statutory
voice in assessing the correctness and appropriateness of that
result. The integrity of the process dictates that the estate spend
reasonable costs for equity to formally have a negotiating voice if
this case could result in the elimination of hundreds of thousands
of dollars in equity investments in the debtor even with the pre-
petition disclosure of value. The process must not only be fair, it
must seem fair. And to meet that standard under the facts and
circumstances of this case, the estate must incur some reasonable
administrative expenses.

Amresco Transcript, at 12-13. Does this sound familiar? The facts before this Court bear
a striking resemblance to those in Amresco, except there is evidence of real value for
preferred shareholders here. Like the Court it Amresco, this Court should uphold the
appearance of fairness for shareholders in chapter 11 cases, and ensure that they receive
adequate representation through the appointment of a statutory committee of preferred
shareholders.
B. The Debtors Are Far From Hopelessly Insolvent and There
Is Sufficient Equity Value in the Estates to Justify
Appointment of a Statutory Committee
21. The financial profit and loss statements for the Unencumbered Debtors for
the last 12 months, ending June 30, 2010, produced by the Debtors in the Ad Hoc
Committees discovery request,
10
indicate that six (6) Unencumbered Debtors are

9
In re Amresco, Transcript of September 7, 2001 Hearing (hereinafter Amresco Transcript) at 12. A
copy of the Amresco Transcript is annexed hereto as Exhibit A.
10
On August 20, 2010, the Ad Hoc Committee sent a discovery request letter to counsel to the Debtors
requesting Any valuation reports, on a consolidated basis and on an individual basis for each of the

NY4 4027225.3
15
generating positive earnings before interest, taxes, depreciation, and amortization
(EBITDA).
22. On September 23, 2010, the Ad Hoc Committee submitted the Maxwell
Declaration and a supporting presentation, which was prepared by Anders Maxwell of
Peter J. Solomon Company (PJSC). The initial assessment in the Maxwell Declaration
is based on financial performance from the last 12 months (LTM). The financial
performance is based on EBITDA.
23. In its report to Midland on April 28, 2010 (the Midland Presentation),
Moelis referenced eleven (11) benchmark lodging companies (the Moelis Benchmark
Properties), which Moelis deemed relevant in benchmarking the Debtors property-level
operating performance. PJSC used these Moelis Benchmark Properties to determine a
multiple by which to multiply LTM EBITDA for the Unencumbered Debtors to come up
with an implied equity value. Using the multiple derived from the Moelis Benchmark
Properties, PJSC determined that the implied equity value for four (4) of the
Unencumbered Debtors is $47.5 million.
11

24. In their attempt to demonstrate that the Debtors are hopelessly insolvent
with respect to the seven Unencumbered Debtors, the Debtors bundle them together and
proclaim their combined debt to be $230 million dollars in the aggregate. See Debtors
Objection at p.6. (emphasis supplied). The Debtors argument on this point is as

Seven Properties. A copy of the discovery request letter is annexed hereto as Exhibit B. To date, the
Debtors have not produced any such valuation report. As discussed below, either the Ad Hoc
Committees advisors, PJSC, are the only party to perform an analysis of the equity value in the
Unencumbered Debtors on an individual basis, or that information was deliberately withheld.
11
PJSC used a 16x multiple, which it derived from the 11 properties Moelis used as benchmark
properties when the Debtors made presentations to Midland. Applying the 16x multiple to just four of
the Unencumbered Debtors suggests a value of these four assets of $171.4 million, net of the $123.9
million in claims in respect of just these assets, yielding an implied residual equity value in these four
assets of $47.5 million. The four properties are: Washington DC Doubletree, Tysons Corner
Residence Inn, San Antonio Homewood Suites and Mission Valley Residence Inn.

NY4 4027225.3
16
simplistic as it is transparent. The debts of the individual Unencumbered Debtors are not
aggregated for the purpose of determining equity value. The equity value from each
Unencumbered Debtor gets pooled at Innkeepers USA LP, but Innkeepers USA LP is not
responsible for any shortfall on the mortgages.
12

25. In other words, if any of the properties held by the Unencumbered Debtors
are worth less than the mortgage, the mortgage holder for such property will have an
unsecured claim against the individual debtor, and not have a claim against the parent
Innkeepers USA LP. The equity value moves up but the unsatisfied claims remain at
the property level debtor.
26. The Debtors and others also argue that there is simply not sufficient
equity value to justify appointment of a statutory equity committee because any equity in
any of the Debtors (including more than $7.4 million in a bank account controlled by
Innkeepers USA LP) should be preserved to pay the administrative costs of all the
Debtors chapter 11 cases, including the costs of the professionals. The Debtors propose,
in essence, using equity in some of the Debtors to prop up the Debtors without equity. If
there really is no value in certain of the property level Debtors, then the Debtors should
walk away from the valueless properties below Innkeepers USA LP and upstream the

12
According to the Innkeepers USA LP schedules, the liquidated unsecured claims of Innkeepers USA
LP amount to a grand total of $208,795.98. The pertinent pages of the Inkeepers USA LP Schedules
are attached hereto as Exhibit C. There are unliquidated and contingent claims listed in the schedules,
including Innkeepers USA LPs obligation under a guarantee of certain obligations in connection with
the Genwood Loan. That guarantee, however, as made clear by the Debtors equity committee
objection, is not of the entire $32 million obligation but instead of limited obligations. The Debtors
schedules also list a secured claim of $25,918,903.29 owing to LNR Partners, Inc. in connection with
the $25.6 million Merrill Lynch CMBS Mortgage Loan. Because the Debtors do not make reference in
any other document filed with this Court that Innkeepers USA LP is obligated on the $25.6 million
CMBS loan (including the objection to the equity committee motion, the first day declaration, and the
cash collateral order), the Ad Hoc Committee believes that there is a mistake in the schedules of
liabilities. The Ad Hoc Committees advisors have placed a value of $36.9 million on the Double Tree
Guest Suites (Washington, D.C.), the borrower under the $25.6 million CMBS loan.

NY4 4027225.3
17
$7.4 million for their shareholders.
13
There is no valid reason why the preferred holders
equity should be used to fund unprofitable debtors unless doing so creates more equity
for the preferred holders. The Debtors are ignoring their fiduciary duties if they propose
otherwise. That the Debtors must not use money available to preferred shareholders to
fund any asset having no value for shareholders is as obvious as the Debtors duty not to
throw money in the garbage!
27. At pages 9 and 10 of their Objection, the Debtors (a) flag a $270 million
liquidation preference held by holders of Class C Preferred Limited Partnership Units at
Innkeepers USA LP, and (b) assert that Innkeepers USA LP may ultimately be
responsible for administrative claims of the Debtors advisors. Significantly, the Class
C Preferred Limited Partnership Units are all held by Innkeepers Financial Corporation
14
,
which is wholly-owned by its corporate parent, Innkeepers. See Debtors Objection at 9.
The bottom line is that those preferred shares are not owned by outsiders entitled to take
$270 million of value from the preferred shareholders at Innkeepers. Equally significant
is the fact that Innkeepers USA LP is not allowed to incur administrative claims for
advisors other than necessary costs and expenses of preserving the estate, pursuant to

13
A copy of the Debtors schedules indicating the $7.4 million in cash is annexed hereto as Exhibit C.
The Debtors never informed the Court or the U.S. Trustee of the substantial cash in the Debtors
control at the hearing on the Plan Support Agreement or in their correspondence with the US Trustee
regarding the request for statutory recognition of a preferred shareholders committee. The Schedule
was filed on or about September 1, 2010. Before the Debtors make any distribution to Lehman or
anyone else from the account holding $7.4 million, the Debtors must establish whether anyone other
than Innkeepers USA Limited Partnership has control of the account, what interest anyone has in the
funds, other than as a potential unsecured claimholder. Although such documents have been requested
by the Ad Hoc Committee, the Debtors have not provided copies of any security agreements or other
documents granting a security interest in the funds. It is unlikely that such documents exist if they
did exist, the Debtors would have produced them.
14
Innkeepers Financial Corporation is wholly owned by Innkeepers (in which the members of the Ad
Hoc Committee own preferred shares), and according to its schedules of liabilities has NO liquidated
unsecured claims and lists only potential contingent claims under a shared services agreement and
franchise agreements. A copy of the pertinent pages of the Innkeepers Financial Corporation
schedules is attached hereto as Exhibit D.

NY4 4027225.3
18
Bankruptcy Code section 503(b)(1)(A). Simply put, given that Innkeepers USA LP is not
an operating company and has very little debt, if Innkeepers USA LP cannot create value
for its shareholders, it has no business incurring administrative expenses in the first place.
Notably, the Debtors fail to quantify (because they cannot) any administrative priority
and unsecured claims that would potentially diminish the preferred shareholders equity
value. As this Court has already witnessed in these cases, such as when the Debtors
failed to disclose that Lehmans interest rate was 2.25%, the Debtors resort to smoke and
mirror tactics that obfuscate the facts at the expense of the fairness of the process.
28. PJSC was not able to look at the joint venture Genwood Raleigh Lessee
LLC (Genwood) because the Debtors have either withheld discovery on Genwood or
simply have no financial data regarding their 49% interest. In the discovery letter sent to
the Debtors on August 20, 2010, counsel to the Ad Hoc Committee requested information
from the Debtors regarding Genwood.
15
More than five (5) weeks later, the Debtors are
only now beginning to provide the requested information. Yet the Debtors leading
argument against solvency is that Genwood might have liabilities? Really? After hiding
the ball on Genwood, thats what they lead with? One would think that, if it is such a
liability, they would have produced the requested information weeks ago.
29. The Maxwell Declaration indicates that Information lacking that would
be required to perform a valuation of the Debtors assets includes, but is not limited to,

15
Counsel to the Ad Hoc Committee requested, but the Debtors have not produced, the following:
Current/historical property level financial data including, but not limited to, ADR, RevPAR,
occupancy rates, and capital expenditure for Genwood, including all financial projections related
thereto;
Any appraisals and underwriting documentation prepared for Genwood in connection with the
refinancing of the property in November 2009;
Any and all documents or reports disclosing the nature and extent of any and all indebtedness of
Grand Prix Holdings LLC; Innkeepers Financial Corporation; and Innkeepers USA Limited
Partnership from January 2010 to the present.

NY4 4027225.3
19
Information regarding the JV Genwood Raleigh, a 355 room hotel that appears to be of
high quality but is not included in any valuation by Moelis. We do know that Genwood
is encumbered by a $32 million mortgage even if the property has lost half of its value
(unlikely), the shortfall is $16 million, of which the non-debtor could potentially be
responsible for 49%.
30. All of these factors indicate that there is significant value, over and above
the costs of an equity committee, that would inure to the benefit of shareholders if they
had adequate representation in these cases.
C. The Incremental Administrative Costs of a Statutory Preferred
Shareholders Committee Do Not Outweigh The Clear Benefits
Statutory Representation Will Yield
31. The Objectors argue that the costs of a statutory preferred shareholders
committee do not outweigh the benefits of statutory representation, see e.g., Debtors
Objection at 14; UCC Objection at 15, notwithstanding that courts have consistently held
that cost alone cannot, and should not, deprive. . . security holders of representation. In
re McClean Indus., 70 B.R. 852, 860 (Bankr. S.D.N.Y. 1987); see also In re Enron
Corp., 279 B.R. 671, 684 (Bankr. S.D.N.Y. 2002) (Added cost alone does not justify the
denial of appointment of an additional committee where it is warranted.).
32. Rather than supporting the preferred shareholders committee, the Debtors
suggest that the Ad Hoc Committee can seek reimbursement under section 503(b)(3)(D)
of the Bankruptcy Code. Lets get this straight: the Debtors have an unlimited budget to
extinguish shareholders, while a hand-full of investors are expected to come out of pocket
to protect the whole class of preferred shareholders based on a speculative right to
reimbursement under section 503(b)(3)(D) of the Bankruptcy Code? Indeed, at the
conclusion of the September 1, 2010 hearing, this Court denied the Debtors Plan Support

NY4 4027225.3
20
Agreement on the grounds that it could not conclude that the debtors exercised due care
in electing to move forward with the current plan term sheet and the proposed valuation
implied therein. See September 1 Transcript at p. 420, lines 5-7. Why should the Court
permit the use of estate assets to compensate the Debtors, their counsel, and advisors for
plain malfeasance, yet prohibit the retention of professionals to assist a statutory
preferred shareholders committee in doing what the Debtors failed to do: maximize the
value of the estates?
33. Likewise, Midland objects to the use of its cash collateral to fund the
professionals of a statutory preferred shareholders committee. See Midland Objection at
4. As the Ad Hoc Committee has discussed previously in the response to Midlands
motion to reconsider the Debtors cash collateral order it filed with this Court on
September 23, 2010, cash collateral can be used in these for all administrative expenses.
See Response of Ad Hoc Committee of Preferred Shareholders to Limited Motion of
Midland Loan Services, Inc. to Reconsider Final Order Authorizing Debtors to (I) Use
The Adequate Protection Parties Cash Collateral and (II) Provide Adequate Protection
to the Adequate Protection Parties, dated September 23, 2010 [Docket No. 480]. No
secured claimholder can request confirmation of a plan and also simultaneously deprive
the estate of moneys that must be paid under the plan as a matter of law. It is undisputed
that Midland has requested termination of exclusivity to propose its own plan. See
Midland Services, Inc.s Motion to Terminate Exclusivity, dated August 30, 2010 [Docket
No. 348]. Midland cannot have it both ways: if it wants to use the bankruptcy process in
lieu of a costly foreclosure proceedings, it cannot do so while denying other parties the
statutory duties and powers entitled to them under the Bankruptcy Code.

NY4 4027225.3
21
D. The Timing of the Application Weighs Strongly in Favor of
Appointment
34. For all the criticisms the Objections raise as purported reasons to decline
the appointment of a statutory preferred shareholders committee, the Objections remain
conspicuously silent on the issue of timing. This comes as little surprise to the Ad Hoc
Committee, as it is undisputed that the timely application for the appointment of a
statutory preferred shareholders committee at this early stage of the cases will not delay
the administration of these chapter 11 cases. Notably, a significant number of the
decisions upon which the Objections rely do address the issue of timing as the
determinative factor against statutory committee appointment.
16
Put simply, unlike the
foregoing cases, this is not a situation where preferred shareholders have moved for the
appointment of a statutory committee merely to extract hold-out value from the Debtors
and impede the progress of plan confirmation. The appointment of a statutory preferred
shareholders committee undeniably advances the public policies Congress wrote, supra,
to underlie the appointment of statutory equity committees.
E. The Ad Hoc Committee Clearly Complies with Rule 2019
35. Both the U.S. Trustee and the Debtors assert that the Verified 2019
Statement filed by the Ad Hoc Committee on August 16, 2010 does not comply with the
disclosure requirements of Rule 2019. See Verified Statement of Ad Hoc Committee

16
See Johns-Manvile, 68 B.R. at 163, 164 (The Manville reorganization is in its final stages, and
approaching confirmation. Much of an official committees potential role in the reorganization has
been completed. It is too late for a committee to exercise its most important functionnegotiating a
reorganization planas a reorganization plan has already been submitted to the bankruptcy court. . . It
is clear from the record that the appointment of official committees would delay the confirmation of
the Manville reorganization.); In re Spansion, Inc., 421 B.R. 151, 164 (Bankr. D. Del. 2009) (After
the conclusion of a disclosure statement hearing and just two months before the scheduled
confirmation hearing, the court emphasized that, [a]t this late time, there is little purpose to forming
an official equity committee and requiring the estate to bear the associated costs.); Williams, 281 B.R.
at 223 (Moreover, the appointment of an equity committee would clearly cause a delay in this case.).

NY4 4027225.3
22
Preferred Shareholders Pursuant to Bankruptcy Rule 2019(a), dated August 16, 2010
[Docket No. 205]; see also U.S. Trustees Objection at 6-7; Debtors Objection at 4.
Among other things, both the U.S. Trustee and the Debtors argue that the Court should
not grant the Ad Hoc Committees statutory committee motion because the Ad Hoc
Committees Verified 2019 Statement purportedly does not meet the standard set forth in
In re Northwest Airlines Corp., 363 B.R. 701 (Bankr. S.D.N.Y. 2007).
36. The Ad Hoc Committee maintains Bankruptcy Rule 2019 does not apply
to ad hoc committees. See In re Premier International Holdings, Inc. et al., 423 B.R. 58
(Bankr. D. Del. 2010). That said, the disclosures set forth by the Ad Hoc Committee in
its Verified Statement clearly provide the holdings and names of committee members.
Indeed, the history behind Rule 2019 leaves no doubt that the drafters of the Rule wrote it
to apply to protective committees that actually control how securities are voted and did
not envision its application to ad hoc committees in modern chapter 11 cases that simply
retain one law firm to save fees on three (3) law firms. One has only to look at Rule
2019(b)(3) referring to the Courts power to hold invalid any authority, acceptance,
rejection, or objection given, procured, or received by an entity or committee The Ad
Hoc Committee has no power to accept or reject a plan, precisely because the committee
controls no securities. It also has no power to object. Rather, each of its members can
object if they desire and retain one law firm to do so. The drafting of the Rule shows it
cannot apply to an ad hoc committee having no power over any holders position on any
issue. In a 1937 Securities and Exchange Commission (SEC) Report, future Supreme
Court Justice William Douglas investigated the predecessor of Rule 2019, which was
adopted in response to perceived abuses in receivership proceedings that enabled large,

NY4 4027225.3
23
institutional Wall Street firms to take advantage of smaller investors. See SEC, Report on
the Study and Investigation of the Work, Activities, Personnel and Functions of
Protective and Reorganization Committees, Part I: Strategy and Techniques of Protective
and Reorganization Committees (1937). Given the role of ad hoc committees today is
markedly different from the role of protective committees in the early twentieth century,
Rule 2019 was clearly never intended to apply to ad ho committees. When applying this
historical reading to the objections of both the U.S. Trustee and the Debtors, the issue
appears nothing more than a red herring intended to shift this Courts attention away from
the overall weakness of the objections to the statutory committee motion.

NY4 4027225.3
24
CONCLUSION
WHEREFORE the Ad Hoc Committee respectfully reiterates its request for the
appointment of a Statutory Equity Committee for the reasons set forth in its Motion and
Reply, and granting it such other and further relief as the Court deems just and proper.

Dated: New York, NY DEWEY & LEBOEUF LLP
September 28, 2010

/s/ Martin J. Bienenstock
Martin J. Bienenstock, Esq.
Irena M. Goldstein, Esq.
Timothy Q. Karcher, Esq.
1301 Avenue of the Americas
New York, New York 10019
Telephone: 212.259.8000
Facsimile: 212.259.6333

Attorneys for Ad Hoc Committee of
Preferred Shareholders

~ :...
.
1 IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
2 DALLAS DIVISION
3 IN RE:
BK. NO: 01-35327-SAF-11
4 AMRESCO, INC.
U ~ S . BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
5 D E B T 0 R
F ll ED
6
.JAN I 0 2002
7
TAWANA C. MARSHALL. CLERK
8
Bv-----------------
Deputy
9
10 TRANSCRIPT OF PROCEEDINGS
11
* * * * * * * * * * * * * * *
12
(Court's Ruling)
13
15
16
17
ORIGINAL
18
19 BE IT REMEMBERED, that on the 7th day of
20 September, 2001, before the HONORABLE STEVEN
21 FELSENTHAL, United States Bankruptcy Judge at Dallas,
22 Texas, the above styled and numbered cause came on
23 for hearing, and the following constitutes the
24 transcript of such proceedings as hereinafter
25 set forth:
NATIONAL COURT REPORTERS 214-651-8393
2
* * * * * * * * * * 1
2 THE COURT: Okay. This will be the
3 Court's bench ruling on the motion of Financial
4 Acquisition Partners, L.P., for the Court to order
5 the appointment of an equity securities holders
6 committee. The Prescott Group joined in that motion.
7 The SEC supports the motion. At the hearing on
8 September 5, one other shareholder appeared to
9 support the motion. The debtors and the committee of
10 unsecured creditors oppose the motion.
11 The Court held an evidentiary hearing
12 on the motion on September 5, 2001, and continued it
13 to completion today. The determination of a motion
14 under Section 1102 for the appointment of an equity
15 security holders committee is a core matter over
16 which this Court has jurisdiction to enter a final
17 order.
18 The Court, on contested matters, is
19 required to make findings of facts and conclusions of
20 law. The parties should understand that this
21 statement from the bench constitutes the Court's
22 findings and conclusions, but because it's a bench
23 ruling, the Court reserves the opportunity to edit or
24 amend or supplement these findings for purposes of
25 clarity and completeness.
NATIONAL COURT REPORTERS 214-651-8393
3
1 Financial Acquisition Partners, L.P.,
2 which is known as FALP, had requested that the U.S.
3 Trustee appoint a committee of equity security
4 holders. The United States Trustee had declined to
5 do so, and the U.S. Trustee has taken no position on
6 this motion, basically deferring to the discretion of
7 the Court.
8 Under Section 1102 of the Bankruptcy
9 Code, request of a party in interest, the Court may
10 order the appointment of a committee of equity
11 security holders if necessary to assure the adequate
12 representation of the equity security holders. Under
13 the statute, the Court must determine if a committee
14 is necessary to assure adequate representation of
15 equity security holders, and if so, the Court must
16 further determine whether to exercise its discretion
17 to order the appointment of a committee.
18 The Wang case discusses this at Section
19
20
149 B.R., page 1 and page 2. The Code does not
define adequate representation. Adequate
21 representation must be determined by the facts of the
22 particular case. To make that determination, and
23 then to exercise its discretion, the Court should
24 consider the following factors: One, the number of
25 shareholders; two, the complexity of the case; three,
NATIONAL COURT REPORTERS 214-651-8393
4
1 whether the cost of the committee would significantly
2 outweigh the concerns for adequate representation;
3 four, the solvency of the debtor; five, the ability
4 or the appearance of the management shareholders to
5 represent the non-management shareholders; six, the
6 integrity of the bankruptcy process; seven, the
7 Congressional intent to protect public shareholders
8 by providing for a negotiating body for shareholders
9 for the formulation of a plan; and eight, the impact
10 on the reorganization process.
11 These guidelines and factors have been
12 enunciated in a series of cases that include the Wang
13 case, the Beker Industries Case at 55 B.R. 945, the
14 Edison Brothers case out of Delaware which apparently
15 is available only on Westlaw and Lexis, and the
16 Imperial Distributing case, another Delaware case
17
18
which apparently has not been published.
memorandum order was filed May 15th, 2001.
The
And also
19 Colliers discusses some of these factors.
20
21
Amresco had publicly traded common
shares of stock, about 2.6 million shares. At the
22 time of the bankruptcy petition, there were about
23 2,500 holders of record, and actually that number may
24 date from March 31, 2001, but there are approximately
25 2,500 holders of record. There were about 12,000
NATIONAL COURT REPORTERS 214-651-8393
5
1 beneficial owners. I believe the officers and
2 directors held about 5 percent of the stock, and the
3 trading of the stock was indeed delisted in July.
4 The case has been designated as a
5 complex Chapter 11 case for purposes of the
6 procedures adopted by this Court. But neither the
7 debt structure nor the equity structure is especially
8
9
or unusually complicated. It is a large case, but
it's not a mega-case. However, the debtor does
10 conduct its business through a multi-level subsidiary
11 structure with two non-debtor subsidiaries operating
12 at a profit; and, therefore, the Court considers the
13 case complex because of the size of the assets and
14 the amount of the debt that had been publicly traded,
15 the public trading of the stock and the structure of
16 the business, but not because of the structure of the
17 debt or the equity alone.
18 The management shareholders may
19 generally perform their fiduciary duties, but they
20 cannot adequately represent the interests of
21 nonmanagement shareholders. With the filing of the
22 petition, the debtors filed a motion to sell its
23 assets and those of its subsidiaries to NCS. The
24 sale proposal holds a prospect of employment for
25 management that may be more lucrative than any
NATIONAL COURT REPORTERS 214-651-8393
6
1 returns that they may receive on the stock. While
2 they may legitimately believe and they may ultimately
3 establish in the case that the sale will be in the
4 best interest of the estate, they cannot advocate a
5 plan on behalf of the shareholders.
6 Mr. Brown, the debtor's CEO,
7 Mr. Robbins, the debtor's financial advisor, and
8 Mr. Cleveland, the creditors' committee's financial
9 advisor, all testified that the debtor was insolvent
10 on the petition date. Adjusting book values as of
11 June 30, 2001, for market factors and a fair market
12 value basis, the testimony was that the debtor is
13 insolvent by a range of between $97 million and $250
14 million. At the NCS sale proposal values,
15 Mr. Cleveland is projecting a return to unsecured
16 creditors of somewhere between 34 to 41 cents on the
17 dollar which would leave no prospect for a
18 shareholder recovery unless the debtor's assets could
19 be sold for an additional approximately $200 million.
20 But all three of those witnesses recognized and hoped
21 that the NCS offer was a floor, and that the sale
22 process would generate more than is currently on the
23 table.
24 FALP did not present contradictory
25 evidence, but i n s t ~ a d contended that it would be
NATIONAL COURT REPORTERS 214-651-8393
1 premature to adjudicate asset value and thereby
2 affect the sales of assets or the negotiation,
3 formulation, and confirmation of a plan. For
7
4 purposes of this motion, the evidence reflects the
5 debtor is insolvent, and the Court notes
6 parenthetically, that under the Bankruptcy Code, the
7 Court is often called on to value a debtor and its
8 assets for particular purposes during the course of a
9 bankruptcy case. So the determination for this
10 motion is not binding on a subsequent determination.
11 The finding of insolvency for this
12 motion, though, does lead the Court into the
13 integrity of the process argument that FALP has
14 advanced and that the Delaware court discussed in the
15 Imperial Distributing case. And actually we have
16 discussed in argument whether this Court recognized
17 it in the Southmark case the March 31, 2001, 10-Q
18 publicly reported an equity value of $154 million.
19 During a proxy contest initiated by
20 FALP in the spring of 2001, Amresco issued a public
21 press release on May 14th, 2001, confirming that
22 value while recognizing the volatility and the timing
23 of securitizations and working with its financial
24 advisors to maximize shareholder value. On July 2,
25 2001, Amresco filed its petition for relief under
NATIONAL COURT REPORTERS 214-651-8393
8
1 Chapter 11 of the Bankruptcy Code. The petition
2 reported equity value. Not until the filing of its
3 schedules and statement of financial affairs did
4 Amresco publicly state its insolvency.
5 Thus as a matter of public disclosure
6 in the months prior to the bankruptcy petition and
7 continuing until the filings of the schedules after
8 the bankruptcy, Amresco publicly reported shareholder
9 value. The stock supposedly traded for some value,
10 albeit rather small, it was still trading for value,
11 even though the bonds during the 12 months prior to
12 bankruptcy were only trading at a 40 to 60 percent
13 range.
14 Amresco contends, however, that the
15 public filings including the 10-Q and the bankruptcy
16 petition reported book values. And all the witnesses
17 agreed that book value did not necessarily equate to
18 market value. Depending on the circumstances, they
19 testified the book value may be more or less than
20 market value. Mr. Brown, Mr. Robbins and
21 Mr. Cleveland testified that indeed the market value
22 for Amresco is less than the book value. They also
23 testified to developments of Amresco's business that
24 required write downs of the book value on June 30th,
25 and actually testified as to continuing developments
NATIONAL COURT REPORTERS 214-651-8393
9
1 that may increase liabilities. The Court has no
2 evidence that from March 31, 2001, until the filing
3 of the schedules, that Amresco ever publicly
4 disclosed or reported that i t ~ book values were
5 greater than its market value, or that business
6 events were actually occurring that would require
7 write downs of book values in the next quarterly
8 statement. Amresco did not state in its public
9 disclosures that the public should not rely on its
10 book values because they did not accurately reflect
11 but rather inflated Amresco's market value.
12 On May 8, 2001, in the proxy materials,
13 Amresco did publicly identify the risks that without
14 a warehouse line that the stock value would be lost.
15 But, at the same time, it reported that they had a
16 strategic plan that would avoid that situation, and
17 indeed, they did have a strategic plan at that time.
18 Thus Amresco provided no meaningful warning to its
19 investors of the write downs or the unreliability of
20 the book values in the days immediately proceeding
21 the bankruptcy case.
22 Whether this was proper or not, Amresco
23 concedes that it filed no disclosure of its material
24 business matters with the SEC and issued no press
25 release until it filed the schedules. There was also
NATIONAL COURT REPORTERS 214-651-8393
10
1 testimony that Amresco did not disclose or suggest
2 that it would have to make a bankruptcy filing. The
3 Court does not consider the FBR report as a report 'of
4 Amresco.
So even though it discussed risks, it was
5 not Amresco making public statements of those risks.
6
Consequently, and based on this record,
7 the public markets knew only that Amresco reported
8 shareholder value from March 31, 2001, until after
9 the bankruptcy petition, but now Amresco reports that
10 it's insolvent. The Court agrees with FALP that the
11 integrity of the bankruptcy process dictates that
12 shareholders receive an explanation of what happened
13. and determine whether they have value to be realized,
14 any causes of action to pursue or any plans or
15 strategies to negotiate.
16 The appearances of a fair bankruptcy
17 process is compounded by: One, the immediate motion
18 to sell the assets; two, the 5 to $6 million loans
19 made to management on the eve of bankruptcy; and,
20 three, the prospect of employment for management with
21 the proposed sale to NCS.
22 FALP is not willing and may not be able
23 to represent the other shareholders in this case.
24 other shareholder has stepped forward to carry that
25 representation. The Code contemplates that a
NATIONAL COURT REPORTERS 214-651-8393
No
11
1 statutory committee may be the only effective means
2 of representing shareholders. The creditors'
3 committee is analyzing some of these issues,
4 including the loans and the prospective employment
5 and the employee benefits, and is analyzing, as is
6 the debtor, a stand alone plan and other options to a
7 sale at auction of the assets of the debtor. But the
8 committee's financial advisors have concluded that
9 equity is completely out of the money, so obviously,
10 the committee will not be adequately representing the
11 equity holders.
12 ,The appointment of an equity committee
13 will increase the costs of the administration of the
14 bankruptcy case. The committee must investigate the
15 pre-petition public valuation of the debtor and
16 endeavor to determine the actual value of the debtor
17 at the present time, and has to try to determine what
18 its recovery prospects are, if there's value they can
19 bring to the estate, or any cause of action, if any,
20 that they should claim as theirs. The appointment of
21 an equity committee will increase the difficulty for
22 other parties in interest to pursue their objections
23 in the case. But assuming that the debtor is indeed
24 insolvent and that its pre-petition public
25 disclosures were proper, and even assuming a return
NATIONAL COURT REPORTERS 214-651-8393
12
1 to unsecured creditors in the 34 to 41 percent range,
2 a bankruptcy case is about more than the return to
3 creditors and the reorganization or sale of the
4 debtor. The bankruptcy case is also about the fair
5 and equitable adjustment or elimination of claims and
6 equity.
7 The debtor and the unsecured creditors'
8 committee contend that equity is out of the money
9 even though Amresco had reported value until it filed
10 its schedules. They argue that there's nothing for
11 equity to represent. But under the facts and
12 circumstances of this case, acceptance of that
13 position as a legitimate result of a bankruptcy
14 process compels that equity have a formal statutory
15 voice in assessing the correctness and
16 appropriateness of that result. The integrity of the
17 process dictates that the estate spend reasonable
18 costs for equity to formally have a negotiating voice
19 if this case could result in the elimination of
20 hundreds of thousands of dollars in equity
21 investments in the debtor even with the pre-petition
disclosure of value. The process must not only be 22
23 fair, it must seem fair. And to meet that standard
24 under the facts and circumstances of this case, the
25 estate must incur some reasonable administrative
NATIONAL COURT REPORTERS 214-651-8393
13
1 expenses.
2 As I stated during the closing
3 arguments, I did try to go back to where this Court
4 had presided over or had cases with equity committees
5 to determine if there was any precedent that I should
6 draw on. I mentioned the Southmark case. Obviously,
7 Southmark was a case of a completely different
8 magnitude, but there's a similarity in this respect.
9 Several months prior to the bankruptcy petition
10 Southmark publicly reported that it had considerable
11 value for the shareholders. On the eve of its
12 petition, it took a $1 billion write down, and that
13
write down eliminated all value for equity. The
14 Court recognized that equity needed to have a
15 committee, even though it came at a significant cost
16 to the estate, to adequately represent equity under
17 those circumstances.
18
We discussed in closing arguments the
19 NeoStar case, and I went back to look at the motion
20 that was filed for the appointment of an equity
21
committee in NeoStar.
The motion reports that in the
22 months proceeding the bankrutpcy petition, NeoStar
23 reported equity value while post-petition the company
24
incurred substantial administrative debt.
As the
25 U.S. Trustee pointed out, the company barely cleared
NATIONAL COURT REPORTERS 214-651-8393
14
1 its administrative expenses and paid its secured
2 creditor. There had been an ad hoc group of
3 shareholders and they had moved for the appointment
4 of an equity committee. Before the Court could
5 consider the motion, the U.S. Trustee had appointed
6 the committee. As Mr. McElreath reported today, that
7 had more to do with the functioning of the creditors'
8 committee at the time than with the position of
9 equity.
But, nevertheless, the result in the
10 immediate time after the appointment of a committee
11 was that there was a formal structured committee to
12 try to determine what happened to the public report
13 of value in the weeks and months immediately
14 proceeding the bankruptcy, and it turned out, indeed,
15 there wasn't value, that the debtor's post-petition
16 position was correct, and the committee lasted a
17 short time. And as quickly as I could determine
18 during the recess, I think they were out of existence
19 in about six weeks. But they at least satisfied
20 themselves as to the legitimacy of the process before
21 the Court.
22 In those cases in this court ranging
23 from the largest and most complex of cases to a case
24 more akin in size to this case the debtors had
25 reported with pre-petition public disclosure, value
NATIONAL COURT REPORTERS 214-651-8393
15
1 for shareholders that appeared to have vanished with
2 the filing of the bankruptcy petition. This Court
3 assured that the shareholders had adequate
4 representation to determine the validity of that
5 insolvency, and hence the legitimacy of the
6 bankruptcy process that eliminated a return on their
7 investments.
8
9
Having addressed the factors, the Court
summarizes them as follows: For the purposes of this
10 motion, the debtor is insolvent, and the cost of an
11
12
equity committee will be significant. But of greater
weight on balance are the following factors:
13 of shareholders, the size of the case and the
14 structure of the business of the debtor, the
Number
15 limitation of management shareholders to represent
16 non-management shareholders, the pre-petition public
17 disclosures and lack of disclosure, the apparent
18 disappearance of shareholder value, the pre-petition
19 management benefits, and the resulting integrity of
20 the process. Those cumulatively compel the Court to
21 conclude the shareholders need a committee to
22 adequately represent them to assure the integrity and
23 fairness of the process, and the legitimacy of the
24 outcome of the case, which may include a validation
25 that there is no return for equity. The Court
NATIONAL COURT REPORTERS 214-651-8393
1
2
3
4
5
6
7
8
9
10
11
12
16
exercises discretion to impose the administrative
costs of the estate of an equity committee. The
Court, therefore, grants the motion without prejudice
to a motion to disband the committee after they have
had a reasonable time to assess the merits of the
case.
And there we are.
Mr. Mojdehi, if you
would please prepare an order to that effect.
I will
note in passing I didn't address the examiner
suggestion because after the suggestion had been
made, no one actually asked the Court to go that
route.
And the Court having determined that from a
13 shareholder advocacy point of view, there has to be
14 an analysis of what happen to the apparent value of
15 the company, and take that and advocate on behalf of
16 the shareholders, I didn't explore the examiner
17 suggestion in greater detail.
Mr. Mojdehi, if you would please 18
19 prepare an order based on the bench ruling. I would
20 ask the U.S. Trustee's office to act on this as soon
21 as possible because the Court has no inclination to
22 delay the process before the Court. Once the process
23 has been established, we need to see how it plays
24 out.
25 MR. MOJDEHI: Thank you very much, Your
NATIONAL COURT REPORTERS 214-651-8393
17
Honor. I again thank you for allowing us to 1
2 participate by phone. We will submit the order to
3 Your Honor.
4 THE COURT: Okay. Thank you. And
5 thank you all for being available so we can get that
6 accomplished today.
7
8
9
MR. HALE: Judge Felsenthal?
THE COURT: Yeah.
MR. HALE: Would if be all right with
10 you -- this is Cooter Hale -- if we simply get a
11 transcript of your ruling and have that filed with
12 the clerk's office as we circulate that as opposed to
13 putting that in the form of an order?
14
15
THE COURT: Yeah. I think all the
order -- that's fine.
All the order needs to do is
16 say, Based on the bench ruling, the motion is
17 granted.
18
19
20
21
22
23
24
25
MR. HALE: Thank you --
THE COURT: Okay. Thank you.
(End of Court's ruling)
NATIONAL COURT REPORTERS 214-651-8393
18
1 C E R T I F I C A T E
2 I, DIANE M. DENNIS, Acting Official Court Reporter
3 in and for the United States Bankruptcy Court for the
4 Northern District of Texas, Dallas Division, certify
5 that during the hearing of the above-entitled and
6 numbered cause, I reported in shorthand the
7 proceedings hereinafter set forth, and that
8 the foregoing pages contain a full, true and correct
9 transcript of said proceedings.
10 GIVEN UNDER MY HAND AND SEAL OF OFFICE on this
11 the 24th day of September, 2001.
12
13
14
15
16
17
18
19
20
21
22
23
24
25

DIANE M. DENNIS
Certified Shorthand Reporter #4347
Acting Official Court Reporter
United States Bankruptcy Court
Northern District of Texas
Dallas Division
NATIONAL COURT REPORTERS 214-651-8393
DEWEY & LEBOEUF
By Email- paul. basta@ kirkland. com
Paul M. Basta, Esq.
Kirkland & Ellis LLP
60 1 Lexington A venue
New York, NY 10022-4611
August 20,2010
Dewey & LeBoeuf LLP
1301 Avenue of the Americas
New York, NY 10019-6092
tel (212) 259-6050
fax (212) 259-6538
Tkarcher@dl.com
Re: In re Innkeepers USA Trust, eta!., ("Innkeepers") Ch. 11 Case No. 10-13800
Dear Paul:
As you know, we represent the Ad Hoc Committee of Preferred Shareholders (the "Ad
Hoc Committee")
1
in connection with the above-referenced chapter 11 cases. The Ad Hoc
Committee has filed a motion seeking the appointment of an examiner, which is scheduled to be
heard on September 1, 2010. In connection therewith, the Ad Hoc Committee requests the
Debtors deliver copies of the following documents to the Ad Hoc Committee no later than
Monday, August 23, 2010:
2
Current/historical property level financial data including ADR, Rev Par, occupancy rates, and
capital expenditure, in each case on an individual property basis and a consolidated basis, for
each ofthe following seven individual hotel properties (collectively, the "Seven Properties"):
Residence Inn in Vienna, Virginia (KP A Tysons Corner RI LLC, Grand Prix
General Lessee LLC)
Homewood Suites in San Antonio Texas (KPA San Antonio HS LLC, Grand
Prix General Lessee LLC)
1
The following holders of approximately 24.0% of Innkeepers' 8% Series C Cumulative Preferred Shares comprise
the Ad Hoc Committee: Brencourt Advisors, LLC; Esopus Creek Advisors, LLC; and Plainfield Special Situations
Master Fund II Limited.
2
Capitalized terms utilized herein, but not defined, shall have the meaning or meanings ascribed to them in the
Amended Declaration of Dennis Craven, Chief Financial Officer ofinnkeepers USA Trust, in Support of First-Day
Pleadings (the "Craven Declaration").
NEW YORK I LONDON MULTINATIONAL PARTNERSHIP I WASHINGTON, DC
ALBANY I ALMATY I BEIJING I BOSTON I BRUSSELS I CHICAGO I DOHA I DUBAI
FRANKFURT 1 HoNG KoNG 1 HousTON 1 JOHANNESBURG (PTY) LTD. 1 Los ANGELES I MADRID I MILAN I Moscow
PARIS MULTINATIONAL PARTNERSHIP I RIYADH AFFILIATED OFFICE I ROME I SAN FRANCISCO I SILICON VALLEY I WARSAW
NY3 3062065.2 398200 000060 8/20/2010 07:28pm
Paul M. Basta
Kirkland & Ellis LLP
August 20,2010
Page 2
Doubletree Guest Suites in Washington, DC (KPA Washington DC DT LLC,
Grand Prix General Lessee LLC)
Hilton in Ontario, California (KP A HI Ontario LLC, Grand Prix Ontario
Lessee LLC)
Residence Inn in San Diego, California (KP A RIMY LLC, Grand Prix RIMY
Lessee LLC)
Residence Inn in Garden Grove, California (KP A RIGG LLC, Grand Prix
RI GG Lessee LLC)
Hilton Suites in Anaheim, California (KP A HS Anaheim LLC, Grand Prix
Anaheim Orange Lessee LLC);
Any valuation reports, on a consolidated basis and on an individual basis for each of the
Seven Properties;
Any financial projections for Innkeepers, including intercompany debt schedule and 13-week
cash flow forecasts against actual cash reports, including financial projections or forecasts
distributed to potential lenders in connection with any potential debtor-in-possession facility;
Current/historical property level financial data including, but not limited to, ADR, RevP AR,
occupancy rates, and capital expenditure for the joint venture Genwood Raleigh Lessee LLC
("Genwood"), including all financial projections related thereto;
Any appraisals and underwriting documentation prepared for Genwood in connection with
the refinancing of the property in November 2009;
Any and all documents or reports disclosing the nature and extent of any and all indebtedness
of Grand Prix Holdings LLC; Innkeepers Financial Corporation; and Innkeepers USA
Limited Partnership from January 2010 to the present.
NYJ 3062065.2 398200 000060 8/20/2010 07:28pm
Paul M. Basta
Kirkland & Ellis LLP
August 20,2010
Page 3
If you have any questions or concerns, please feel free to contact me directly.
cc: Martin Bienenstock
Irena Goldstein
NY3 3062065.2 398200 000060 8/20/2010 07:28pm
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

)
In re: ) Chapter 11
)
INNKEEPERS USA TRUST, et al.,
1
) Case No. 10-13800 (SCC)
)
Debtors. ) Jointly Administered
)
SCHEDULES OF ASSETS AND LIABILITIES FOR
INNKEEPERS USA LIMITED PARTNERSHIP
1

CASE NO. 10-13794 (SCC)


1
The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtors federal tax identification
number, are: GP AC Sublessee LLC (5992); Grand Prix Addison (RI) LLC (3740); Grand Prix Addison (SS)
LLC (3656); Grand Prix Albany LLC (3654); Grand Prix Altamonte LLC (3653); Grand Prix Anaheim Orange
Lessee LLC (5925); Grand Prix Arlington LLC (3651); Grand Prix Atlanta (Peachtree Corners) LLC (3650);
Grand Prix Atlanta LLC (3649); Grand Prix Atlantic City LLC (3648); Grand Prix Bellevue LLC (3645); Grand
Prix Belmont LLC (3643); Grand Prix Binghamton LLC (3642); Grand Prix Bothell LLC (3641); Grand Prix
Bulfinch LLC (3639); Grand Prix Campbell / San Jose LLC (3638); Grand Prix Cherry Hill LLC (3634); Grand
Prix Chicago LLC (3633); Grand Prix Columbia LLC (3631); Grand Prix Denver LLC (3630); Grand Prix East
Lansing LLC (3741); Grand Prix El Segundo LLC (3707); Grand Prix Englewood / Denver South LLC (3701);
Grand Prix Fixed Lessee LLC (9979); Grand Prix Floating Lessee LLC (4290); Grand Prix Fremont LLC
(3703); Grand Prix Ft. Lauderdale LLC (3705); Grand Prix Ft. Wayne LLC (3704); Grand Prix Gaithersburg
LLC (3709); Grand Prix General Lessee LLC (9182); Grand Prix Germantown LLC (3711); Grand Prix Grand
Rapids LLC (3713); Grand Prix Harrisburg LLC (3716); Grand Prix Holdings LLC (9317); Grand Prix
Horsham LLC (3728); Grand Prix IHM, Inc. (7254); Grand Prix Indianapolis LLC (3719); Grand Prix Islandia
LLC (3720); Grand Prix Las Colinas LLC (3722); Grand Prix Lexington LLC (3725); Grand Prix Livonia LLC
(3730); Grand Prix Lombard LLC (3696); Grand Prix Louisville (RI) LLC (3700); Grand Prix Lynnwood LLC
(3702); Grand Prix Mezz Borrower Floating 2, LLC (9972); Grand Prix Mezz Borrower Fixed, LLC (0252);
Grand Prix Mezz Borrower Floating, LLC (5924); Grand Prix Mezz Borrower Term LLC (4285); Grand Prix
Montvale LLC (3706); Grand Prix Morristown LLC (3738); Grand Prix Mountain View LLC (3737); Grand
Prix Mt. Laurel LLC (3735); Grand Prix Naples LLC (3734); Grand Prix Ontario Lessee LLC (9976); Grand
Prix Ontario LLC (3733); Grand Prix Portland LLC (3732); Grand Prix Richmond (Northwest) LLC (3731);
Grand Prix Richmond LLC (3729); Grand Prix RIGG Lessee LLC (4960); Grand Prix RIMV Lessee LLC
(4287); Grand Prix Rockville LLC (2496); Grand Prix Saddle River LLC (3726); Grand Prix San Jose LLC
(3724); Grand Prix San Mateo LLC (3723); Grand Prix Schaumburg LLC (3721); Grand Prix Shelton LLC
(3718); Grand Prix Sili I LLC (3714); Grand Prix Sili II LLC (3712); Grand Prix Term Lessee LLC (9180);
Grand Prix Troy (Central) LLC (9061); Grand Prix Troy (SE) LLC (9062); Grand Prix Tukwila LLC (9063);
Grand Prix West Palm Beach LLC (9065); Grand Prix Westchester LLC (3694); Grand Prix Willow Grove
LLC (3697); Grand Prix Windsor LLC (3698); Grand Prix Woburn LLC (3699); Innkeepers Financial
Corporation (0715); Innkeepers USA Limited Partnership (3956); Innkeepers USA Trust (3554); KPA HI
Ontario LLC (6939); KPA HS Anaheim, LLC (0302); KPA Leaseco Holding Inc. (2887); KPA Leaseco, Inc.
(7426); KPA RIGG, LLC (6706); KPA RIMV, LLC (6804); KPA San Antonio, LLC (1251); KPA Tysons
Corner RI, LLC (1327); KPA Washington DC, LLC (1164); KPA/GP Ft. Walton LLC (3743); KPA/GP
Louisville (HI) LLC (3744); KPA/GP Valencia LLC (9816). The location of the Debtors corporate
headquarters and the service address for its affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite
306, Palm Beach, Florida 33480.
SUMMARY OF SCHEDULES
Indicate as to each schedule whether that schedule is attached and state the number of pages in each. Report the totals
from Schedules A, B, D, E, F, I, and J in the boxes provided. Add the amounts from Schedules A and B to determine the
total amount of the debtor's assets. Add the amounts of all claims from Schedules D, E, and F to determine the total
B6 Summary (Official Form 6 - Summary) (12/07)
AMOUNTS SCHEDULED
NAME OF SCHEDULE
ATTACHED
(YES/NO)
ASSETS LIABILITIES
OTHER
NO. OF
SHEETS
Total
United States Bankruptcy Court
A - Real Property
B - Personal Property
C - Property Claimed
As Exempt
D - Creditors Holding
Secured Claims
E - Creditors Holding Unsecured
Priority Claims
F - Creditors Holding Unsecured
Nonpriority Claims
G - Executory Contracts and
Unexpired Leases
H - Codebtors
I - Current Income of
Individual Debtor(s)
J - Current Expenditures of
Individual Debtor(s)
B6
YES
YES
NO
YES
YES
YES
YES
YES
NO
NO 0
1
7
0
1
2
9
4
9
0
$4,400,000.00
$11,842,047.83
$25,918,903.29
$0.00
$208,795.98
33
Southern District Of New York
Case No. (If known) Debtor
Innkeepers USA Limited Partnership 10-13794
Chapter
11
$26,127,699.27 $16,242,047.83
amount of the debtor's liabilities. Individual debtors must also complete the Statistical Summary of Certain Liabilities
and Related Data if they file a case under chapter 7, 11, or 13.
(Total of Claims on Schedule E)
SCHEDULES OF ASSETS AND LIABILITIES


EXHIBIT B-2

CHECKING, SAVINGS OR OTHER FINANCIAL ACCOUNTS

Innkeepers USA Limited Partnership
Case No. 10-13794
Schedule B-2: Checking, Savings or Other Financial Accounts, Certificates of Deposit or Shares in Banks, Savings and Loan,
Thrift, Building and Loan, and Homestead Associations, or Credit Unions, Brokerage Houses, or Cooperatives.
Bank Account No. Account Title 7/19/10 Balance
Bank of America XXXXXXXX 0768 Grand Prix Acquisition Trust 6,809.29 $
Bank of America XXXXXX 9490 Innkeepers USA Limited Partnership 7,374,907.91 $
Trimont XXXXXX 2071 Required Repairs - 001 - Trimont Real Estate Advisors, Inc SIB-
Servicer For Wachovia Bank As Servicer For The Holder Of The
Sasco 2008-C2 Notes And The Related Preferred Interest Escrow
Account
10,357.18 $
Trimont XXXXXX 8202 * Ground Rent Reserve 004 - Lehman Brothers Holdings Inc. As
Debtor In Possession Combined
- $
Trimont XXXXXX 8202 * Required Repairs Reserve - 003 - Lehman Brothers Holdings Inc. As
Debtor In Possession Combined Escrow And Reserve Account
- $
Trimont XXXXXX 8202 * Tax Escrow - Lehman Brothers Holdings Inc. As Debtor In
Possession Combined Escrow And Reserve Account
369,039.31 $
Trimont XXXXXX 8202 * FF&E - 002 - Lehman Brothers Holdings Inc. As Debtor In
Possession Combined Escrow And Reserve Account
- $
Trimont XXXXXX 8202 * Capital Improvement (Pip) - 001 - Lehman Brothers Holdings Inc. As
Debtor In Possession Combined Escrow And Reserve Account
- $
Wachovia XXXXX 2226 Replacement Reserve Loan 892,359.19 $
Wells Fargo XXXXXX 9458 Grand Prix Holding, LLC Pledge Cash Management Account Fbo
Metlife, Trimont Real Estate Advisors As Servicer
296.37 $
8,653,769.25 $ Grand Total - Accounts
* The bank accounts located at Trimont with account numbers ending in 8202 shown on Schedule B-2 are subject to the control and security
interest of Lehman as a result of certain terms of the Floating Rate Mortgage Loan Agreement. The Debtors do not have the authority to direct
disbursements out of such accounts. Amounts shown are based upon the best information available to the Debtors. Due to limited information
received by the Debtor on these accounts, a complete reconciliation cannot be performed as the date of the most recent bank statement
received by the Debtor is dated April 30, 2010.
Page 1 of 1
SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS
(Continuation Sheet)
Case No. (If known) Debtor
Innkeepers USA Limited Partnership 10-13794
B6F (Official Form 6F) (12/07) - Cont.
F3: Litigation
CREDITOR'S NAME AND
MAILING ADDRESS,
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
DATE CLAIM WAS INCURRED, AND
CONSIDERATION FOR CLAIM. IF
CLAIM SUBJECT TO SETOFF, SO
STATE.
C
O
D
E
B
T
O
R
H
W
J
C
C
O
N
T
I
N
G
E
N
T
U
N
L
I
Q
U
I
D
A
T
E
D
D
I
S
P
U
T
E
D
AMOUNT
OF CLAIM
(See instructions above.)
ACCOUNT NO.
X X X LITIGATION
NON-PAYMENT
ONYX SEALCOATING
15113 S. KILBOURN
MIDLOTHIAN, IL 60445
unknown
ACCOUNT NO.
X X X LITIGATION
NON-PAYMENT
THE COLLECTION BUREAU
11160 HURON ST, #201A
NORTHGLENN, CO 80234
unknown
ACCOUNT NO.
X X X LITIGATION
ADA - BARRED SERVICE DOG
WITTMAN, CAROL
KEVIN COSTELLO
C/O COSETLLO & MAINS
2090 EAST ROUTE 70
CHERRY HILL, NJ 08003
unknown
F3: Litigation Total $0.00
F4: Secured Parties Unsecured Claims
CREDITOR'S NAME AND
MAILING ADDRESS,
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
DATE CLAIM WAS INCURRED, AND
CONSIDERATION FOR CLAIM. IF
CLAIM SUBJECT TO SETOFF, SO
STATE.
C
O
D
E
B
T
O
R
H
W
J
C
C
O
N
T
I
N
G
E
N
T
U
N
L
I
Q
U
I
D
A
T
E
D
D
I
S
P
U
T
E
D
AMOUNT
OF CLAIM
(See instructions above.)
ACCOUNT NO.
X X Y $25.6M MERRILL LYNCH CMBS MORTGAGE LOAN
LNR PARTNERS, INC.
1601 WASHINGTON AVENUE, SUITE 800
MIAMI BEACH, FL 33139
UNKNOWN
F4: Secured Parties Unsecured Claims Total $0.00
F6: Codebtors
CREDITOR'S NAME AND
MAILING ADDRESS,
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
DATE CLAIM WAS INCURRED, AND
CONSIDERATION FOR CLAIM. IF
CLAIM SUBJECT TO SETOFF, SO
STATE.
C
O
D
E
B
T
O
R
H
W
J
C
C
O
N
T
I
N
G
E
N
T
U
N
L
I
Q
U
I
D
A
T
E
D
D
I
S
P
U
T
E
D
AMOUNT
OF CLAIM
(See instructions above.)
ACCOUNT NO.
X X Y $32M RALEIGH JV MORTGAGE LOAN AGREEMENT
NON-RECOURSE CARVE-OUT GUARANTEE AND
ENVIRONMENTAL INDEMNIFICATION
CSE MORTGAGE GROUP LLC
4445 WILLARD AVENUE, 12TH FLOOR
CHEVY CHASE, MD 20815
UNKNOWN
Subtotal
(Total of this page)
Page 7 of 9 $0.00
SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS
(Continuation Sheet)
Case No. (If known) Debtor
Innkeepers USA Limited Partnership 10-13794
B6F (Official Form 6F) (12/07) - Cont.
F6: Codebtors
CREDITOR'S NAME AND
MAILING ADDRESS,
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
DATE CLAIM WAS INCURRED, AND
CONSIDERATION FOR CLAIM. IF
CLAIM SUBJECT TO SETOFF, SO
STATE.
C
O
D
E
B
T
O
R
H
W
J
C
C
O
N
T
I
N
G
E
N
T
U
N
L
I
Q
U
I
D
A
T
E
D
D
I
S
P
U
T
E
D
AMOUNT
OF CLAIM
(See instructions above.)
ACCOUNT NO.
X X Y $32M RALEIGH JV MORTGAGE LOAN AGREEMENT
RIGHT OF USE GUARANTEE
CSE MORTGAGE GROUP LLC
4445 WILLARD AVENUE, 12TH FLOOR
CHEVY CHASE, MD 20815
UNKNOWN
ACCOUNT NO.
X X Y CONTRACT\AGREEMENT
GROUND LEASE
INNKEEPERS USA LIMITED PARTNERSHIP
ATTN: MARK A. MURPHY
340 ROYAL POINCIANA WAY
SUITE 306
SUITE 306
$0.00
ACCOUNT NO.
X X Y CONTRACT\AGREEMENT
SHARED SERVICES AGREEMENT
ISLAND HOSPITALITY MANAGEMENT, INC.
50 COCOANUT ROW SUITE 200
PALM BEACH, FL 33480
$0.00
ACCOUNT NO.
X X Y $32M RALEIGH JV MORTGAGE LOAN AGREEMENT
CONTRIBUTION FOR NON-RECOURSE CARVE-OUT
GUARANTEE AND ENVIRONMENTAL INDEMNIFICATION
KARIM ALIBHAI
801 BRICKELL AVENUE, PH 2
MIAMI, FL 33131
UNKNOWN
ACCOUNT NO.
X X Y $32M RALEIGH JV MORTGAGE LOAN AGREEMENT
CONTRIBUTION FOR RIGHT OF USE GUARANTEE
KARIM ALIBHAI
801 BRICKELL AVENUE, PH 2
MIAMI, FL 33131
UNKNOWN
ACCOUNT NO.
X X Y CONTRACT\AGREEMENT
GROUND LEASE
KPA WASHINGTON DC, LLC
DOUBLETREE WASHINGTON DC
801 NEW HAMPSHIRE AVE., NW
WASHINGTON, DC 20037
$0.00
ACCOUNT NO.
X X Y CONTRACT\AGREEMENT
CONSENT AND AGREEMENT
MARRIOTT INTERNATIONAL, INC.
ATTN: FRANCHISE ATTORNEY, LAW DEPARTMENT
52/923.25
10400 FERNWOOD ROAD
BETHESDA, MD 20817
$0.00
ACCOUNT NO.
X X Y CONTRACT\AGREEMENT
CONSULTING AGREEMENT
MERITAX PROPERTY TAX CONSULTANTS
14800 LANDMARK BLVD., #550
DALLAS, TX 75254
$0.00
Subtotal
(Total of this page)
Page 8 of 9 $0.00
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

)
In re: ) Chapter 11
)
INNKEEPERS USA TRUST, et al.,
1
) Case No. 10-13800 (SCC)
)
Debtors. ) Jointly Administered
)
SCHEDULES OF ASSETS AND LIABILITIES FOR
INNKEEPERS FINANCIAL CORPORATION
1

CASE NO. 10-13880 (SCC)


1
The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtors federal tax identification
number, are: GP AC Sublessee LLC (5992); Grand Prix Addison (RI) LLC (3740); Grand Prix Addison (SS)
LLC (3656); Grand Prix Albany LLC (3654); Grand Prix Altamonte LLC (3653); Grand Prix Anaheim Orange
Lessee LLC (5925); Grand Prix Arlington LLC (3651); Grand Prix Atlanta (Peachtree Corners) LLC (3650);
Grand Prix Atlanta LLC (3649); Grand Prix Atlantic City LLC (3648); Grand Prix Bellevue LLC (3645); Grand
Prix Belmont LLC (3643); Grand Prix Binghamton LLC (3642); Grand Prix Bothell LLC (3641); Grand Prix
Bulfinch LLC (3639); Grand Prix Campbell / San Jose LLC (3638); Grand Prix Cherry Hill LLC (3634); Grand
Prix Chicago LLC (3633); Grand Prix Columbia LLC (3631); Grand Prix Denver LLC (3630); Grand Prix East
Lansing LLC (3741); Grand Prix El Segundo LLC (3707); Grand Prix Englewood / Denver South LLC (3701);
Grand Prix Fixed Lessee LLC (9979); Grand Prix Floating Lessee LLC (4290); Grand Prix Fremont LLC
(3703); Grand Prix Ft. Lauderdale LLC (3705); Grand Prix Ft. Wayne LLC (3704); Grand Prix Gaithersburg
LLC (3709); Grand Prix General Lessee LLC (9182); Grand Prix Germantown LLC (3711); Grand Prix Grand
Rapids LLC (3713); Grand Prix Harrisburg LLC (3716); Grand Prix Holdings LLC (9317); Grand Prix
Horsham LLC (3728); Grand Prix IHM, Inc. (7254); Grand Prix Indianapolis LLC (3719); Grand Prix Islandia
LLC (3720); Grand Prix Las Colinas LLC (3722); Grand Prix Lexington LLC (3725); Grand Prix Livonia LLC
(3730); Grand Prix Lombard LLC (3696); Grand Prix Louisville (RI) LLC (3700); Grand Prix Lynnwood LLC
(3702); Grand Prix Mezz Borrower Floating 2, LLC (9972); Grand Prix Mezz Borrower Fixed, LLC (0252);
Grand Prix Mezz Borrower Floating, LLC (5924); Grand Prix Mezz Borrower Term LLC (4285); Grand Prix
Montvale LLC (3706); Grand Prix Morristown LLC (3738); Grand Prix Mountain View LLC (3737); Grand
Prix Mt. Laurel LLC (3735); Grand Prix Naples LLC (3734); Grand Prix Ontario Lessee LLC (9976); Grand
Prix Ontario LLC (3733); Grand Prix Portland LLC (3732); Grand Prix Richmond (Northwest) LLC (3731);
Grand Prix Richmond LLC (3729); Grand Prix RIGG Lessee LLC (4960); Grand Prix RIMV Lessee LLC
(4287); Grand Prix Rockville LLC (2496); Grand Prix Saddle River LLC (3726); Grand Prix San Jose LLC
(3724); Grand Prix San Mateo LLC (3723); Grand Prix Schaumburg LLC (3721); Grand Prix Shelton LLC
(3718); Grand Prix Sili I LLC (3714); Grand Prix Sili II LLC (3712); Grand Prix Term Lessee LLC (9180);
Grand Prix Troy (Central) LLC (9061); Grand Prix Troy (SE) LLC (9062); Grand Prix Tukwila LLC (9063);
Grand Prix West Palm Beach LLC (9065); Grand Prix Westchester LLC (3694); Grand Prix Willow Grove
LLC (3697); Grand Prix Windsor LLC (3698); Grand Prix Woburn LLC (3699); Innkeepers Financial
Corporation (0715); Innkeepers USA Limited Partnership (3956); Innkeepers USA Trust (3554); KPA HI
Ontario LLC (6939); KPA HS Anaheim, LLC (0302); KPA Leaseco Holding Inc. (2887); KPA Leaseco, Inc.
(7426); KPA RIGG, LLC (6706); KPA RIMV, LLC (6804); KPA San Antonio, LLC (1251); KPA Tysons
Corner RI, LLC (1327); KPA Washington DC, LLC (1164); KPA/GP Ft. Walton LLC (3743); KPA/GP
Louisville (HI) LLC (3744); KPA/GP Valencia LLC (9816). The location of the Debtors corporate
headquarters and the service address for its affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way, Suite
306, Palm Beach, Florida 33480.
SUMMARY OF SCHEDULES
Indicate as to each schedule whether that schedule is attached and state the number of pages in each. Report the totals
from Schedules A, B, D, E, F, I, and J in the boxes provided. Add the amounts from Schedules A and B to determine the
total amount of the debtor's assets. Add the amounts of all claims from Schedules D, E, and F to determine the total
B6 Summary (Official Form 6 - Summary) (12/07)
AMOUNTS SCHEDULED
NAME OF SCHEDULE
ATTACHED
(YES/NO)
ASSETS LIABILITIES
OTHER
NO. OF
SHEETS
Total
United States Bankruptcy Court
A - Real Property
B - Personal Property
C - Property Claimed
As Exempt
D - Creditors Holding
Secured Claims
E - Creditors Holding Unsecured
Priority Claims
F - Creditors Holding Unsecured
Nonpriority Claims
G - Executory Contracts and
Unexpired Leases
H - Codebtors
I - Current Income of
Individual Debtor(s)
J - Current Expenditures of
Individual Debtor(s)
B6
YES
YES
NO
YES
YES
YES
YES
YES
NO
NO 0
1
5
0
1
2
1
1
8
0
$0.00
$0.00
$0.00
$0.00
$0.00
19
Southern District Of New York
Case No. (If known) Debtor
Innkeepers Financial Corporation 10-13880
Chapter
11
$0.00 $0.00
amount of the debtor's liabilities. Individual debtors must also complete the Statistical Summary of Certain Liabilities
and Related Data if they file a case under chapter 7, 11, or 13.
(Total of Claims on Schedule E)
SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIMS
B6F (Official Form 6F) (12/07)
Case No. (If known) Debtor
Innkeepers Financial Corporation 10-13880
Check this box if debtor has no creditors holding general unsecured claims to report on this Schedule F.
State the name, mailing address, including zip code, and last four digits of any account number, of all entities holding unsecured claims without priority
against the debtor or the property of the debtor, as of the date of filing of the petition. The complete account number of any account the debtor has with the
creditor is useful to the trustee and the creditor and may be provided if the debtor chooses to do so. If a "minor child" is a creditor, state the child's initials and
the name and address of the child's parent or guardian, such as "A.B., a minor child, by John Doe, guardian." Do not disclose the child's name. See, 11
U.S.C. 112 and Fed. R. Bankr. P. 1007(m). Do not include claims listed in Schedules D and E. If all creditors will not fit on the page, use the continuation
sheet provided.
If any entity other than a spouse in a joint case may be jointly liable on a claim, place an "X" in the column labeled "Codebtor," include the entity on the
appropriate schedule of creditors, and complete Schedule H - Codebtors. If a joint petition is filed, state whether the husband, wife, both of them, or the marital
community may be liable on each claim by placing a "H," "W," "J," or "C," in the column labeled "Husband, Wife, Joint or Community."
If the claim is contingent, place an "X" in the column labeled "Contingent." If the claim is unliquidated, place an "X" in the column labeled "Unliquidated." If
the claim is disputed, place an "X" in the column labeled "Disputed." (You may need to place an "X" in more than one of these three columns.)
Report the total of all claims listed on this schedule in the box labeled "Total" on the last sheet of the completed schedule. Report this total also on the
Summary of Schedules and, if the debtor is an individual with primarily consumer debts, report this total also on the Statistical Summary of Certain Liabilities
and Related Data.
F6: Codebtors
CREDITOR'S NAME AND
MAILING ADDRESS,
INCLUDING ZIP CODE,
AND ACCOUNT NUMBER
DATE CLAIM WAS INCURRED, AND
CONSIDERATION FOR CLAIM. IF
CLAIM SUBJECT TO SETOFF, SO
STATE.
C
O
D
E
B
T
O
R
H
W
J
C
C
O
N
T
I
N
G
E
N
T
U
N
L
I
Q
U
I
D
A
T
E
D
D
I
S
P
U
T
E
D
AMOUNT
OF CLAIM
(See instructions above.)
ACCOUNT NO.
X X Y CONTRACT\AGREEMENT
SHARED SERVICES AGREEMENT
ISLAND HOSPITALITY MANAGEMENT, INC.
50 COCOANUT ROW SUITE 200
PALM BEACH, FL 33480
$0.00
ACCOUNT NO.
X X Y CONTRACT\AGREEMENT
CONSENT AND AGREEMENT
MARRIOTT INTERNATIONAL, INC.
ATTN: FRANCHISE ATTORNEY, LAW DEPARTMENT
52/923.25
10400 FERNWOOD ROAD
BETHESDA, MD 20817
$0.00
ACCOUNT NO.
X X Y CONTRACT\AGREEMENT
FRANCHISE AGREEMENT
PROMUS HOTELS, INC
ATTN: GENERAL COUNSEL
9336 CIVIC CENTER DRIVE
BEVERLY HILLS, CA 90210
$0.00
F6: Codebtors Total $0.00
$0.00 Total
Subtotal
(Total of this page)
Page 1 of 1 $0.00